10 Self-Assessment Expenses That Can Reduce the Tax You Pay
Running your own business can be quite the challenge, and the responsibilities seem never-ending. For instance, you should consider the allowable expenses you may claim as tax deductions. If you want to save more money, here are some self-assessment expenses you can claim against the tax you have to pay.
You may be able to claim subscriptions if you can prove your business requires them. To determine whether a subscription is eligible, you should ask yourself:
- Does it relate directly to the running of my business?
- Is it something an ordinary person in my position would typically purchase?
- Are there any other circumstances that would suggest I shouldn’t claim it?
If you answer “yes” to all three questions, you can claim the cost of the subscription as a tax deduction.
2. Staff Expenses
If you decide to hire staff to help you run your business, you can claim the cost of paying their salaries as a tax deduction. However, you cannot claim money to pay for holidays or sick days.
3. Unpaid Invoices
If you are owed money for your services, you can claim an allowance for the time you spend chasing the debt. The allowance is the amount you have invoiced the client multiplied by your relevant employee tax rate.
4. Mileage Costs
If you use your car to conduct your business, you may be able to claim the costs. However, you can only claim the business portion of your travel expenses and the standard rate of fuel.
5. Donations to Charity
If you donate goods or money directly to a charity, you can claim the donation costs. However, you should be aware that there are exceptions to this rule. For example, you cannot claim donations to charities to organisations you are a member of.
6. Office Supplies
You can claim the costs of office supplies, such as pens, paper, ink cartridges, or desk cleaning supplies, provided they are directly related to your business. In addition, you can claim business software and hardware and office furniture, including desks and chairs.
7. Legal and Financial Expenses
Legal and financial expenses are generally considered to fall under business expenses. This means they are tax-deductible, provided they have been incurred in generating income. For example, an accountant can calculate your tax obligations, and a lawyer can claim the cost of preparing a contract.
8. Internet and Phone Bills
You can claim the cost of the internet and phone connection in your business as a tax deduction. You can also claim a portion of your internet and phone bill if you spend a reasonable time working from home.
You can claim the cost of any utilities you use for your business. However, you cannot claim any personal expenses, such as electricity for your TV or your pool.
10. Repairs and Maintenance
If your business equipment needs to be fixed or replaced, you can claim the cost of the repairs as a tax deduction. You can also claim for expenses related to the upkeep of your property, including the garden, driveway, and the inside of your house.
Running your own business can have its perks — especially if you enjoy the financial rewards. However, you should be aware of the taxes you have to pay and the tax breaks to help you save. As you can see, there are various self-assessment expenses you can claim as tax deductions.
Learn more about self-assessment tax and other financial responsibilities when you work with us at 1 to 1 Accountants. We offer all types of accounting services for small business owners and professionals. Give us a call, and one of our dedicated account managers will discuss opportunities with you.